Tag Archive for: payments

TIS Global Payments Peak

12-04-2022 | treasuryXL | TIS | LinkedIn |

TIS invites you to this virtual event. Get to know the product roadmap for 2022, the TIS Enterprise Payment Optimization story and much more.


TIS invites you to join us for our annual event, Global Payments Peak, on April 28th at 2:30 PM CET.

 

Enjoy an afternoon full of information and networking on our event app as we reflect on our vision and product roadmap for 2022. Get the opportunity to hear from our customers how they use our solution to build defences against payment fraud.

  • Register today and find out about our vision and product roadmap for 2022.
  • Hear news from TIS, engage in sessions with existing TIS customers as well as industry experts.
  • Learn what Enterprise Payment Optimization is and how TIS can help your company to optimize its payment processes.

We will reveal an agenda in due course. Stay tuned for more information

Ready to get started? Register now.

Insurance within Treasury

07-04-2022 | treasuryXL | ComplexCountries | LinkedIn |

After many years of weak markets and low insurance premiums, many companies have probably been buying more cover than they may really need. A market where premiums are rising is causing companies to re-evaluate their approach. This re-evaluation involves many complex questions around risk appetite, collaboration with other functions (Legal, HR, Logistics, Manufacturing, IT), the use of brokers, tax, and others. This gives the treasurer the opportunity to really demonstrate his or her value to the business.

This report was compiled by Monie Lindsey. based on a Treasury Peer Call chaired by Damian Glendinning.

Source

Chair’s Overview

The strategic treasurer. The risk manager for the company. Where better for the treasurer to get out of the traditional disciplines of simply managing liquidity and bank accounts, than in managing insurance? Risk management meets budget and operational constraints, and it is a very financial discipline.

This call was initiated by a member who is struggling with increasing premiums as the market hardens, and wanted to know whether other treasurers who are responsible for insurance are taking the same measures, i.e., reducing the purchase of cover and increasing deductibles. The quick answer to that question is yes, in response to significant premium increases, many members are taking another look at the levels of cover. The other question was whether there are additional, more creative ideas.

This triggered a wide-ranging discussion:

  • Should insurance be in treasury? The consensus – not surprisingly – was yes, but responsibility often lies with, or is shared with, legal and HR.
  • How useful are captives? One member finds them useful to accelerate the tax deduction for losses. Others find them useful for centralising risk and losses away from the operating units – this can depend on the company’s management system. Others are wary of the cost and complexity of a captive.
  • Should you use brokers? If so, how effective are RFPs between brokers? One member made savings by changing brokers following an RFP. One member does some negotiating directly with the insurers – but this can be heavy lifting.
  • What is the correct balance between self-insurance and buying risk? There does not seem to be a scientific answer.
  • The classical approach to solving this question is to benchmark versus what other companies are buying – but this does not confirm that this is the correct level for your company.
  • Part of the equation is determining the level of risk and earnings volatility a company is prepared to accept.
  • A company will have different levels of risk retention for different lines of risk
  • Some risks can become very difficult to insure: one participant is having big issues with theft of cargo in the port of Los Angeles, with the activity of organised crime. This is a frequent issue in Latin America.
  • Several participants felt one of the benefits of buying insurance was access to expert advice on risk management, leading to better protected facilities, e.g., better fire prevention, and enhanced anti-theft measures.
  • The use of captives to self-insure HR benefits was raised. This is possible, and can be done easily for some benefits. However, it is an area which is heavily regulated, with many mandatory state run schemes, especially in Europe.
  • On the other hand, travel insurance can often be combined with useful services, such as emergency assistance.
  • There was a discussion about cyber insurance: one participant had experienced a hack, and found that the insurance company provided outstanding assistance in managing the situation before it got out of control. Others were less sure the risk was significant enough to justify the expense.
  • Changes to the business often bring changes to the insurance cover required.

Bottom line: After many years of weak markets and low insurance premiums, many companies have probably been buying more cover than they may really need. A market where premiums are rising is causing companies to re-evaluate their approach.

This re-evaluation involves many complex questions around risk appetite, collaboration with other functions (Legal, HR, Logistics, Manufacturing, IT), the use of brokers, tax, and others. This gives the treasurer the opportunity to really demonstrate his or her value to the business.

Please get in touch to sign up for free updates, request a sample report, or find out about our services. Enquire

Treasury RFP’s digitization

06-04-2022 | treasuryXL | Treasury Delta | LinkedIn | The optimal, objective, and transparent selection of treasury supplier solutions and/or banking services, observing procurement principles and guidelines, remains a complicated challenge for all treasurers. It is extremely time-consuming and cost-ineffective. This article highlights a niche fintech solution developed by Treasury Delta to successfully digitize the […]

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SAP Integration with the SAP Add-on

24-03-2022 | treasuryXL | TIS | LinkedIn |

Outsource the technical challenge of bank connectivity to a payments expert.

Benefits of integrating TIS with our certified SAP Add-on

For many SAP clients, bank connectivity is a technical challenge. Find out, how integrating SAP with TIS can help you:

  • Replace fragmented data streams with a unified interface for all payments
  • Significantly improve your bank communication
  • Ease the technical integration of an in-house bank with TIS and SAP Advanced Payment Management (APM)

 

The SAP Add-on is available for all systems (SAP ByDesign, ECC6.0, S/4HANA on-premise, public cloud and private cloud).

Download the free Fact Sheet

 

Russia Ukraine Crisis Update

16-03-2022 | treasuryXL | ComplexCountries | LinkedIn |

Safety of employees and delivery of salary payments are the highest priorities of treasurers responsible for Russia and Ukraine who also shared their experiences approaches to sanctions compliance, local operations and FX hedging. This report is based on an emergency 90-minute peer call with participation from 15 major companies.

This report was compiled by Monie Lindsey. based on a Treasury Peer Call chaired by Damian Glendinning.

Source

Chair’s Overview

Today’s call was very somber. Two weeks ago (Report: Russia Treasury & Banking Update 21st Feb), members were looking at contingency plans, but the consensus was that most of what was happening was posturing, and that the worst would not happen. Today, there was no discussion of how long hostilities might last – most people agree that there is no easy or rapid solution in sight. Instead, the main priority of most participants is making sure their teams are safe, helping them leave Ukraine if they wish, and making sure salary payments get through in both countries. We all send our best wishes to the many people whose lives have been shattered by this conflict.

The actions and approaches were remarkably consistent across all the participants. Topics discussed and actions taken:

  • The main priority is the safety of the local teams. Nearly every participant has taken extra steps to make sure local staff have cash, including prepaying salaries by up to three months. This is being done in both Russia and Ukraine, as MNCs cannot be sure of being able to remit cash to Russia in the future.
  • Most participants have either exited, suspended, or slowed down their businesses in Russia. Those who are importing goods into Russia for sale locally are continuing business as long as inventories last, but they are not shipping new inventory into the country.
  • There were a few questions about the sanctions, but the general view is that these are clear. Even if a company wants to ship goods into Russia, it is proving very difficult to find logistics companies that are prepared to undertake the shipment.
  • Payments continue for the time being. In Ukraine, the banking system continues to function, and some participants have sent cash into the country to make sure salaries are paid. Paying cash out of Ukraine is no longer possible, but payments continue to be made out of Russia, even if they can be slowed down due to additional sanctions checks.
  • The main sanctions-related discussion was about the extent to which local payments within Russia can still be made using sanctioned banks. The general feeling was that this is allowed, though there was some confusion. Participants have received conflicting advice about whether there is an effective carve-out in the sanctions for salary payments.
  • Foreign banks are registered under local law in Russia, so they can, and do, continue to operate. As usual, some are providing better service than others.
  • One issue raised with sanctions is that they can cause issues for the local staff: it may be illegal under local law for them to apply the sanctions, or it can cause them personal issues. This is usually being monitored closely with HR and Legal.
  • Most companies are re-evaluating their hedging programs:
    • Hedging the rouble has become a lot more expensive, and there is unlikely to be much underlying business to hedge, so most programs will probably stop.
    • In many cases, it is proving difficult, or impossible, to roll existing hedges
    • For NDFs, the reference rate used for settlement is no longer being quoted *(see note below), so it will be necessary to negotiate with the banks about what alternative rate to use
    • No participant was concerned about forwards which require them to deliver roubles outside Russia. However, companies to whom this applies are advised to discuss this situation with their banks: if they find themselves unable to deliver the roubles on the due date, the situation can become messy and potentially expensive.
  • Some participants have bolstered local liquidity in Russia by taking out local bank loans, which continue to be available – though there is some nervousness about how long lines may be available. Many have sent in cash via intercompany loans to make sure salaries and taxes can be paid. Several participants have also bolstered the liquidity of their Ukrainian operations by sending in intercompany loans.
  • There was little discussion about how to continue making payments despite the sanctions. It was pointed out that, even if a bank is barred from SWIFT, payments can still be made using paper instructions – though delays may occur due to the need to implement new correspondent banking relationships and apply additional sanctioned party checks. In any case, the feeling is that sanctions will limit the amount of business giving rise to payments.
  • A couple of participants are being impacted by the removal of international credit cards: this impacts Russian staff currently outside the country on short-term assignments, and those receiving payment by credit card from inside Russia.

Bottom line: the main concern is the safety of local staff and making sure they have enough cash to survive. Business in Russia is basically on hold, but cash is still flowing where it is required, especially for salary payments. Participants are being very careful to adhere to the new sanctions.

Again, we all hope that the bloodshed will soon come to an end.

*Note: 10th March we have subsequently heard that the central bank is providing a daily fix against the USD at a rate that is lower than the market rate (105 – 115 compared to 130-140).

Would you like a full copy of this report?

Request a Copy, but please make a donation to the Save the Children Ukraine Humanitarian Appeal

Interest payments – How to calculate the days

| 07-03-2018 | Lionel Pavey | treasuryXL | LinkedIn

When entering into a financial transaction you need to be aware of the settlement dates. If you have a contract that states that you must pay on the 1st day of every month what do you do when that date is a non-working day? Furthermore, to be able to calculate the interest owed on a loan, you also need to know what the denominator is – the number of days in a year for the particular product and contract. When a payment cannot take place on a particular date – because it is not a recognised business day, you need to know the convention that the bank uses to adjust the payment date. Here is an overview of the most commonly used business day conventions (which determine how non-business days are handled) and calculation bases.

Business day conventions | Modified Following

Preceding – the first preceding day that is a business day
Following – the first following day that is a business day
Modified Following – the first following day that is a business day, unless the days falls in the next calendar month, in which case the date will be the first preceding day that is a business day

Furthermore reference will be made to the applicable currency calendar for determining non-working days. For EUR this would mean TARGET, for GBP this would mean London, for euro USD this would mean London and New York.

Calculation basis

Actual/360 (Money Market) – the coupon payment is calculated using the exact number of days in the period divided by 360. The start date is included in the calculation, but not the last day.

Actual/365 (Fixed) – the coupon payment is calculated using the exact number of days in the period divided by 365. The start date is included in the calculation, but not the last day

Actual/Actual (ISDA) – the coupon payment is calculated using the exact number of days, with the portion of days belonging in a non-leap year divided by 365 and the portion of days belonging in a leap year divided by 366. The start date is included in the calculation, but not the last day.

Actual/Actual (ISMA) – the coupon payment is calculated using the exact number of days divided by the length of the year, where the length of the year is equal to the number of days in the coupon period multiplied by the number of coupon periods in the year.

30/360 (Bond basis) – the coupon is calculated over 30 days for every full calendar month and the actual number of days for the remaining fraction of a month, divided by 360.

30/360E (Eurobond basis) – the coupon is calculated on the basis of a year of 360 days with 12 30-day months, unless the end date is the last day of February, which is not lengthened to a 30-day month.

Coupon calculation conventions

Adjusted – Interest is calculated on the effective payment date adjusted for the business day

Unadjusted – Interest is calculated on the theoretical payment date, regardless of the effective payment date.

If you are interested to know what the effect of these changes can be on a coupon payment and calculation, please contact us for more detailed information.

Lionel Pavey

 

Lionel Pavey

Cash Management and Treasury Specialist

 

Treasury Delta and Blokken Partnership

03-03-2022 | treasuryXL | Treasury Delta | LinkedIn | Treasury Delta, our Irish fintech partner, recently formed an alliance with Blokken, a Dubai-based fintech aggregator. This strategic partnership will bring further innovation and digital technology deployment to the corporate treasury ecosystem within the Middle East. Credits: Blokken Source

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Crypto Transactions & Corporate Treasury

28-02-2022 | treasuryXL | ComplexCountries | LinkedIn |

CompleXCountries has yet to meet a corporate treasurer who wants to transact in crypto currency, but we are speaking to many who are responding to commercial or regulatory initiatives and having to establish processes and procedures for doing so. This panel discussion between Damian Glendinnig, John Laurens, and Simon Jones explores the new risks and challenges that corporate treasurers face and suggests how they might respond.

WEBINAR ALERT | Connectivity – The Key to the Future and Digital Transformation

24-02-2022 | treasuryXL | TIS | LinkedIn |

Date: Tuesday, March 8, 2022

Time: 4:00 PM – 5:00 PM CET

Time: 10:00 AM – 11:00 AM ET

Taking a look at a dictionary, connectivity in computing is described as “the ability of systems, platforms and applications to be connected to each other”.

But what does this mean for payments in particular and how can you benefit from it?

Register today for this webinar and hear Erol Bozak, CPO, Jacques Yana Mbena, Head of PreSales Europe, and Jonathan Paquette, VP Solutions US, talk about:

  • What are the differences between integration and connectivity?
  • What types of connectivity are there and why is there such complexity?
  • How to simplify connectivity in order to achieve growth and change
  • Real-life examples of how TIS connects clients to providers and banks
  • How TIS can help your company to achieve growth and change in the Digital Age

 

We are very much looking forward to meeting you online: Register here.

Instant Payments: the SEPA Instant Payments rulebook is published, what’s next?

| 20-2-2017 | Boudewijn Schenkels | Sponsored content |

At the end of last year the SEPA Instant Payments requirements from the European Payments Council have been published. Consequently the Dutch requirements 3.0 from the Dutch Payments Association were published last month.

SEPA Instants Payments (also called SCT Inst – SEPA Credit Transfer Instant) will allow sending and receiving money 24/7 in seconds. European banking communities can go live from November 2017, the Dutch community has planned to go live from May 2019 with the first Instant Payments services. The development of the SEPA Instant Payments infrastructures of the banks and processors are in train. In april 2018 the start of the inter-CSM testing is planned, the end-to-end bank tests and the pilot phase from January until April 2019.

From our Instant Payments training classes for business professionals and IT staff, we find that participants are not fully aware of the large impact Instant Payments will have on the complete value chain and the opportunities it will bring. In order for you to understand the impact and opportunities, I will explain how Instant Payments are processed.

To give an impression of all the change aspects for users, the banks and the interbank processing side:

For corporates amongst others:

  • Different and new initiation processes, including, if applicable, instant insight in the failure of the payment;
  • New cash management and/or ERP applications or upgrades;
  • Reconciliation aspects;
  • Requirements for instant insight of bank account mutations;
  • Changed processes to monitor late payments (as they can be delivered eg. in the weekend);
  • Evaluate the potential of new services based on Instant Payments;
  • 24/7 operation required?
  • Possibilities in product differentiation.

 For banks amongst others:

  • Support new payments processes;
  • Real time and 24/7 reporting;
  • Extra notifications and reach filtering (as SEPA Instant Payments is not mandatory);
  • Revised (24/7) operational processes;
  • Changes to fraud/AML/sanctions management;
  • New sales and product management activities and roles;
  • Changes liquidity management processes and monitoring;
  • New clearing channel(s).

For processors amongst others:

  • New clearing and settlement processes;
  • Revised operational processing and monitoring;
  • New sales and product management activities and roles

As the launch dates come nearer it certainly triggers managers to now thoroughly evaluate scope and time scales for (required) internal projects and ensure to be ready and steady before launch in 2019 as well as business professionals to anticipate and grasp the potential opportunities.

The key differences between the current SEPA Credit Transfer and the new SCT Inst scheme are:

  • 24/7 available (no downtime)
  • real-time (5 seconds in Netherlands round trip)
  • real-time failure notifications
  • single transaction only

Instant Payments process

In our training, we also explain the differences between the normal payment flow (SCT) and the Instant Payments flow (SCT Inst). The process flow is described below in summary and will take place in several seconds.

 

Figure 1. (Source: EPC Rulebook)

Several key actors are involved in the payments process:

  • Originator: party sending the payment (payer, customer of the bank)
  • Originator bank: the bank of the payer
  • CSM: interbank party that clears and settles the payments between banks (Clearing and Settlement Mechanism)
  • Beneficiary bank: the bank of the payee
  • Beneficiary: the party receiving the payment (payee, customer of the bank)

The new process in summary:

The Originator Bank receives an SCT Inst Instruction from the Originator (Step 1). It verifies the instruction and sends the transaction to the CSM (Step 2), which verifies the message, ensures that the Originator bank has enough funds and instantly sends the SCT Inst Transaction message to the Beneficiary Bank. The Beneficiary Bank instantly verifies the payments and if it can be booked on the account of the Beneficiary (Step 3). The Beneficiary Bank confirms to the CSM if it was successful (positive confirmation) or not (negative confirmation with an immediate Reject) (Step 4). The Beneficiary can withdraw the funds (Step 5) instantly if in the previous step the confirmation was positive (and after the Beneficiary Bank has ensured that the CSM received the positive confirmation message). The CSM instantly reports to the Originator Bank if the SCT Inst Transaction had been successful (or not) (Step 6). In case the Originator Bank receives a negative confirmation about the SCT Inst transaction which indicates that the funds had not been made available to the beneficiary, the originator bank is obliged to immediately inform the originator (Step 7) and lift the reservation of the amount made in step 1.

All in seconds and 24/7!

This all means, that beside the flow of money, there is also a flow of messages between the customer and the bank. Both Beneficiary and Originator will be informed (in a few seconds) that the transaction is done (or not).

Are you interested in what the new SEPA Instant Payment will mean for your organization?
Come to our next open training (March 15 in Utrecht) or inquire about the possibilities of an in-house training.
More information at: www.paymentsadvisorygroup.com.
If you have any questions please contact us via: [email protected] .

 

Boudewijn Schenkels

Senior Consultant Payments @ Payments Advisory Group